Importance of Economy.

But in addition to safety and reliability another factor that has to be kept in view is the necessity for economic working. It is essential that the service be conducted with a minimum of cost. The reduction of goods tonnage due to the present trade depression has been seriously felt by the Department. The law of Increasing Returns applies to the Railway business, and the greater the volume of business, the less the cost per unit. Much of the expenditure is fixed and does not depend upon the volume of business, so that a rise in volume decreases unit costs, while a drop in the volume of traffic increases unit costs.

The present depression has, therefore, had a serious effect on the Railway finances, and unprecedented efforts have had to be made to counterbalance the fall in revenue. In addition to other economies it has been necessary to curtail train mileage in sympathy with the reduction in traffic and in revenue. In making these curtailments great care has been exercised to gauge the requirements of the district concerned in conjunction with the traffic being carried, and curtailments have been made only where it appeared that the least inconvenience would be caused to the users of the Railway.

As an indication of the reductions that have had to be made during the past year, it may be stated that train mileage was reduced by 1,198,986 train miles, or 10.45 per cent. This curtailment has been made without serious inconvenience to our clients.

The advent of the motor vehicle, and the great improvement in road surfacing during recent years, has added to the difficulty in holding traffic and maintaining the service on an economic basis.

The Transportation Branch is continually on the look-out for means of improving the service without undue additional cost, and particularly for ways of accelerating despatch of traffic and giving greater convenience to its clients. In this respect a definite programme of improvement to, passenger carriages is being carried on as funds available permit. A close contact is kept with modern transport developments, such as those in connection with rail motor vehicles, so that any development suitable to the conditions peculiar to this country may be exploited when circumstances are favourable. The service is being constantly overhauled to effect every possible economy in operation that will not detract from the value of the service given, as it is recognised that in this time of economic depression the Transportation industry, like all other businesses, must reduce operating costs to maintain stability in the industry. At the same time the Transportation Branch of the Railways keeps in close touch with the business needs of the community, and is fully alive to the imperative necessity for a safe, prompt, and reliable transport service.